1Q/17 Global HW Pulp Market Review: Growth of 338K t in global demand for BEKP (Feb/17 vs. Feb/16); demand supports price hikes
(Sao Paulo, Brazil, April 28, 2017) This year began on a more positive note for the pulp market. The increase in demand was confirmed by the decline in inventories of hardwood to 37 days, according to the PPPC’s Global 100 Report, and a year-on-year upturn in eucalyptus pulp shipments, mainly to Asia. The positive fundamentals allowed Fibria to announce new price increases [valid as of April 01] of
• US$20/t for Europe and North America in January;
• US$30/t for all regions in February;
• US$30/t for Europe and North America and US$20/t for Asia in March;
• and US$40/t for Europe and North America and US$20/t for Asia, valid as of April 1.
The pulp market improved in beginning of the year, yet another quarter marked by buoyant demand for eucalyptus pulp, with Fibria’s sales totaling 1,307 thousand tons of pulp. Price increases have been fully and rapidly implemented.
The announced increases of US$ 20/t for Europe and North America in January; US$ 30/t for all regions in February; and US$ 30/t for Europe and North America and US$ 20/t for Asia in March were fully implemented. Nevertheless, the fundamentals show an unbalanced market, creating a favorable environment for a new price increase announcement, US$ 40/t for Europe and North America and US$ 20/t for Asia, valid as of April 1.
According to the PPPC’s Global-100 report, Chinese demand for hardwood pulp continues to grow consistently, moving up by 21% in the first two months of this year, compared to the same period of the previous year.
Also according to the Global-100 report, hardwood pulp sales grew 9% in the first two months of 2017 compared to the same period last year, as shown below:
BHKP and BEKP Shipments – Feb.17 vs. Feb.16
(change % and ‘000 ton)
Source: PPPC – Global 100 Report
Demand for hardwood pulp should continue rising in the second quarter given the prospect of capacity reduction, with no new capacity start-ups. (Source: Fibria Q1 /2017 Financial Report)